On March 17, a significant development took place in the Indian stock market as both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) announced that they were moving NDTV from the second to the first stage of the long-term Additional Surveillance Measure (ASM) framework. This move signaled increased monitoring and scrutiny of the company’s trading activities.
However, recent circulars posted on the BSE and NSE websites have revealed that NDTV is set to be excluded from the ASM framework, effective May 22. This means that the company will no longer be subjected to the enhanced surveillance measures imposed under the ASM framework. The decision to exclude NDTV from the framework indicates that the exchanges have found the company’s trading activities to be compliant with regulatory standards.
Interestingly, in the preceding week, both exchanges had granted an exit from the ASM framework to three Adani Group stocks: Adani Total Gas, Adani Transmission, and Adani Green Energy. This move came after US-based short-seller Hindenburg Research released a report on January 24, leveling allegations of fraud and stock manipulation against the Adani Group. The conglomerate has consistently refuted all these allegations, asserting their commitment to transparency and compliance with regulatory requirements.
The ASM framework was introduced by the Securities and Exchange Board of India (SEBI) to monitor and regulate trading activities that could potentially be manipulative or fraudulent. Under this framework, securities are categorized into various stages based on their liquidity, market capitalization, and trading patterns. Companies listed under the ASM framework are subject to increased surveillance, and stricter measures are taken to ensure fair and transparent trading practices.
NDTV’s inclusion in the ASM framework in March indicated that the exchanges perceived some anomalies in the company’s trading activities that warranted enhanced monitoring. However, the subsequent decision to exclude NDTV from the framework suggests that the exchanges have either found no evidence of wrongdoing or that the company has rectified any identified issues.
Similarly, the removal of Adani Group stocks from the ASM framework implies that the exchanges have evaluated the allegations made by Hindenburg Research and deemed them unsubstantiated. It is worth noting that the Adani Group has vehemently denied all accusations, reiterating their adherence to ethical business practices.
These developments highlight the crucial role of surveillance measures in maintaining the integrity and credibility of the Indian stock market. The ASM framework serves as a regulatory mechanism to identify and address potential risks associated with trading activities. By closely monitoring companies and ensuring compliance, exchanges aim to protect investors and maintain market confidence.
As the stock market landscape continues to evolve, regulatory bodies and exchanges remain committed to upholding fairness, transparency, and accountability. The inclusion and subsequent exclusion of NDTV from the ASM framework, alongside the exit granted to Adani Group stocks, demonstrate the diligent efforts of the exchanges to safeguard the interests of market participants while maintaining the integrity of the Indian stock market.